FORM OF FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
Exhibit
10.7
This
Agreement is made and entered into as of the _____
day of
February, 2008 by and between Pacific Restaurant Holdings, Inc., a Delaware
corporation (the “Company”),
and
Xxxxxx & Xxxxxx Securities Corporation, a New York corporation (the
“Advisor”).
In
consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto agree as follows:
1.
Purpose:
The
Company hereby engages the Advisor for the term specified in Paragraph 2 hereof
to render consulting advice to the Company as an investment banker relating
to
financial and similar matters upon the terms and conditions set forth
herein.
2.
Term:
Except
as otherwise specified in Paragraph 4 hereof, this Agreement shall be effective
from ________,
2008 to
________,
2010.
3. Duties
of the Advisor:
During
the term of this Agreement, the Advisor shall provide advice and opinions to
the
Company on subjects including but not necessarily limited to management issues,
mergers and acquisitions. Advisor will determine in its sole discretion time,
place and manner of the services it renders as well as the overall amount of
time Advisor expends in providing service under this Agreement. Such advice
and
opinions will most often be given orally. However, the Company may occasionally
and reasonably request that advice or opinions be provided in
writing.
4. Compensation:
In
consideration for the services rendered by the Advisor to the Company pursuant
to this Agreement (and in addition to the expenses provided for in Paragraph
5
hereof), the Company shall compensate the Advisor as follows:
(a) The
Company shall pay the Advisor a fee of $72,000 per year for the entire term
of
this Agreement. The $144,000 aggregate fee shall be payable on the date
hereof.
(b) In
the
event that any Transaction occurs during the term of this Agreement or one
year
thereafter, the Company shall pay fees to the Advisor as follows:
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Consideration
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Fee
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$
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0 - to $ 500,000
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$25,000
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$
500,000 to $5,000,000
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5%
of Consideration
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$5,000,000
or more
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$250,000
plus 1% of the Consideration in excess of
$5,000,000
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For
the
purposes of this Agreement, “Consideration”
shall
mean the total market value on the day of the closing of stock, cash, assets
and
all other property (real or personal) exchanged or received, directly or
indirectly by the Company or any of its security holders in connection with
any
Transaction. In
the
event that the Consideration is not in the form of Securities of a publicly
traded company, the parties shall mutually appoint an independent third party
to
make a determination as to the fair market value of such property whose
valuation shall be final. Any co-broker and/or co-underwriter retained by the
Advisor shall be paid by the Advisor.
(c) For
the
purposes of the Agreement, the term “Transaction”
shall
include (i) any transaction originated by the Advisor, other than in the
ordinary course of trade or business of the Company, whereby, directly or
indirectly, control of, or a material interest in, the Company or any of its
businesses or any of their respective assets, is transferred for Consideration,
(ii) any transaction originated by the Advisor whereby the Company acquires
any
other company or the assets of any other company or an interest in any other
company (an "Acquisition") or (iii) any joint venture or line of credit arranged
by the Advisor for the benefit of the Company as more fully set forth in the
next paragraph.
Notwithstanding
Paragraph 4(b) above, in the event the Advisor originates a line of credit
with
a lender or a corporate partner, or the Advisor introduces the Company to a
joint venture partner or customer and sales develop as a result of the
introduction, the Company and the Advisor will mutually agree on a satisfactory
fee and the terms of payment of such fee.
(d) All
fees
to be paid pursuant to this Agreement, except as otherwise specified, are due
and payable to the Advisor in cash at the closing or closings of any
Transaction. In the event that this Agreement shall not be renewed or if
terminated for any reason, notwithstanding any such non-renewal or termination,
the Advisor shall be entitled to the full fees set forth in Section 4(a) for
the
entire term of this Agreement and a full fee and repayment of all expenses
as
provided under Paragraphs 4(b) and 5 hereof, for any Transaction for which
the
discussions were initiated during the term of this Agreement and which is
consummated within a period of 12 months after non-renewal or termination of
this Agreement. Nothing herein shall impose any obligation on the part of the
Company to enter into any Transaction.
5. Expenses
of the Advisor:
In
addition to the fees payable hereunder and regardless of whether any Transaction
is proposed or consummated, the Company shall reimburse the Advisor for all
reasonable fees and disbursements of the Advisor's counsel and the Advisor's
travel and out-of-pocket expenses incurred in connection with the services
performed by them pursuant to this Agreement, including without limitation,
hotels, food and associated expenses and long-distance telephone calls, except
that all fees and disbursements of the Advisor's counsel and expenses exceeding
$500 must be pre-approved in writing by the Company.
-2-
6. Liability
of the Advisor:
The
Company acknowledges that all opinions and advice (written or oral) given by
the
Advisor to the Company in connection with the Advisor's engagement are intended
solely for the benefit and use of the Company in considering the Transaction
to
which they relate, and the Company agrees that no person or entity other than
the Company shall be entitled to make use of or rely upon the advice of the
Advisor to be given hereunder, and no such opinion or advice shall be used
for
any other purpose or reproduced, disseminated, quoted or referred to at any
time, in any manner or for any purpose, nor may the Company make any public
references to the Advisor, or use the Advisor's name in any annual reports
or
any other reports or releases of the Company, in
each case,
without
the Advisor's prior written consent.
7.
The
Advisor's Services to Others:
The
Company acknowledges that the Advisor or its affiliates are in the business
of
providing financial services and consulting advice to others. Nothing herein
contained shall be construed to limit or restrict the Advisor in conducting
such
business with respect to others, or in rendering such advice to
others.
8.
Company
Information:
(a) The
Company recognizes and confirms that, in advising the Company and in fulfilling
its engagement hereunder, the Advisor will use and rely on data, material and
other information furnished to the Advisor by the Company. The Company
acknowledges and agrees that in performing its services under this engagement,
the Advisor may rely upon the data, material and other information supplied
by
the Company without independently verifying the accuracy, completeness or
veracity of same.
(b) Except
as
contemplated by the terms hereof or as required by applicable law in the opinion
of counsel to the Company, the Advisor shall keep confidential all non-public
information provided to it by the Company, and shall not disclose such
information to any third party without the Company's prior written consent,
other than such of its employees and advisors as the Advisor determines to
have
a need to know. In the event that the Advisor discloses such information to
its
employees or advisors, it will cause such employees or advisors to be bound
by
the provisions of this Section 8(b).
9.
Indemnification:
(a) The
Company shall indemnify and hold harmless the Advisor against any and all
liabilities, claims, lawsuits, including any and all awards and/or judgments
to
which it may become subject under the Securities Act of 1933 (the "1933 Act"),
the Securities Exchange Act of 1934, (the "Act") or any other federal or state
statute, at common law or otherwise, insofar as said liabilities, claims and
lawsuits (including costs, expenses, awards and/or judgments) arise out of
or
are in connection with the services rendered by the Advisor or any Transactions
effected in connection with this Agreement, except for any liabilities, claims
and lawsuits (including awards and/or judgments), arising out of acts or
omissions of the Advisor. In addition, the Company shall also indemnify and
hold
harmless the Advisor against any and all costs and expenses, including
reasonable counsel fees, incurred or relating to the foregoing.
-3-
The
Advisor shall give the Company prompt notice of any such liability, claim or
lawsuit which the Advisor contends is the subject matter of the Company's
indemnification and the Company thereupon shall be granted the right to take
any
and all necessary and proper action, at its sole cost and expense, with respect
to such liability, claim and lawsuit, including the right to settle, compromise
and dispose of such liability, claim or lawsuit, excepting therefrom any and
all
proceedings or hearings before any regulatory bodies and/or
authorities.
The
Advisor shall indemnify and hold harmless the Company against any and all
liabilities, claims and lawsuits, including any and all awards and/or judgments
to which it may become subject under the 1933 Act, the Act or any other federal
or state statute, at common law or otherwise, insofar as said liabilities,
claims and lawsuits (including costs, expenses, awards and/or judgments) arise
out of or are based upon any untrue statement or alleged untrue statement of
a
material fact or the omission to disclose a material fact required to be stated
or necessary to make the statement not misleading, which statement or omission
was made in reliance upon information furnished in writing to the Company by
or
on behalf of the Advisor for inclusion in any registration statement, prospectus
or other document or any amendment or supplement thereto in connection with
any
Transaction to which this Agreement applies. In addition, the Advisor shall
also
indemnify and hold harmless the Company against any and all costs and expenses,
including reasonable counsel fees, incurred or relating to the
foregoing.
The
Company shall give the Advisor prompt notice of any such liability, claim or
lawsuit which the Company contends is the subject matter of the Advisor's
indemnification and the Advisor thereupon shall be granted the right to a take
any and all necessary and proper action, at its sole cost and expense, with
respect to such liability, claim and lawsuit, including the right to settle,
compromise or dispose of such liability, claim or lawsuit, excepting therefrom
any and all proceedings or hearings before any regulatory bodies and/or
authorities.
(b) In
order
to provide for just and equitable contribution under the 1933 Act in any case
in
which (i) any person entitled to indemnification under this Paragraph 9 makes
claim for indemnification pursuant hereto but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Paragraph 9 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of any such person
in circumstances for which indemnification is provided under this Paragraph
9,
then, and in each such case, the Company and the Advisor shall contribute to
the
aggregate losses, claims, damages or liabilities to which they may be subject
(after any contribution from others) in such proportion taking into
consideration the relative benefits received by each party from the offering
covered by the prospectus or other document with respect to any Transactions
in
connection with this Agreement (taking into account the portion of the proceeds
of the offering realized by each), the parties' relative knowledge and access
to
information concerning the matter with respect to which the claim was assessed,
the opportunity to correct and prevent any statement or omission and other
equitable considerations appropriate under the circumstances; provided, however,
that notwithstanding the above in no event shall the Advisor be required to
contribute any amount in excess of 10% of the offering price of any securities
to which such prospectus applies; and provided, that, in any such case, no
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who
was
not guilty of such fraudulent misrepresentation.
-4-
Within
15
days after receipt by any party to this Agreement (or its representative) of
notice of the commencement of any action, suit or proceeding, such party will,
if a claim for contribution in respect thereof is to be made against another
party (the "Contributing Party"), notify the Contributing Party of the
commencement thereof, but the omission to so notify the Contributing Party
will
not relieve it from any liability which it may have to any other party other
than for contribution hereunder. In case any such action, suit or proceeding
is
brought against any party, and such party notifies a Contributing Party or
his
or its representative of the commencement thereof within the aforesaid 15 days,
the Contributing Party will be entitled to participate therein with the
notifying party and any other Contributing Party similarly notified. Any such
Contributing Party shall not be liable to any party seeking contribution on
account of any settlement of any claim, action or proceeding effected by such
party seeking contribution without the written consent of the Contributing
Party. The indemnification provisions contained in this Paragraph 9 are in
addition to any other rights or remedies which either party hereto may have
with
respect to the other or hereunder.
10.
The
Advisor as an Independent Contractor:
The
Advisor shall perform its services hereunder as an independent contractor and
not as an employee of the Company or affiliates thereof. It is expressly
understood and agreed to by the parties hereto that the Advisor shall have
no
authority to act for, represent or bind the Company or any affiliate thereof
in
any manner, except as may be agreed to expressly by the Company in writing
from
time to time.
11.
Miscellaneous:
(a) This
Agreement between the Company and the Advisor constitutes the entire agreement
and understanding of the parties hereto, and supersedes any and all previous
agreements and understandings, whether oral or written, between the parties
with
respect to the matters set forth herein.
(b) Any
notice or communication permitted or required hereunder shall be in writing
and
shall be deemed sufficiently given if hand-delivered or sent (i) postage prepaid
by registered mail, return receipt requested, or (ii) by facsimile, to the
respective parties as set forth below, or to such other address as either party
may notify the other in writing:
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If
to the Company, to:
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Pacific
Restaurant Holdings, Inc.
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000
Xxxx Xxxx Xxx, Xxxxx 000
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Xxxxxxxxx,
XX 00000
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Attention:
Xxxx Xxxxx
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-5-
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With
a copy to:
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Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP
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0000
Xxxxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attn:
Xxxxxx X. Xxxxxxx, Esq.
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If
to Xxxxxx & Xxxxxx Securities Corporation
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Xxxxxx
& Xxxxxx Securities Corporation
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000
Xxxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention:
Xxxxxxx Xxxxxxx
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With
a copy to:
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Xxxxxxx
Xxxxxx LLP
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000
Xxxxxxxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention;
Xxxxxx X. Xxxxxx, Esq.
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(c) This
Agreement shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors, legal representatives and
assigns.
(d) This
Agreement may be executed in any number of counterparts, each of which together
shall constitute one and the same original document.
(e) No
provision of this Agreement may be amended, modified or waived, except in a
writing signed by all of the parties hereto.
(f) This
Agreement may be terminated by a written agreement signed by both of the parties
hereto. Upon termination of the Agreement, no party hereto shall thereafter
have
any further liability or obligation hereunder other than the Company's
obligations under Paragraph 4(d).
(g) This
Agreement shall be construed in accordance with and governed by the laws of
the
State of New York, without giving effect to conflict of law principles. The
parties hereby agree that any dispute which may arise between them arising
out
of or in connection with this Agreement shall be adjudicated before a court
located in New York City, and they hereby submit to the exclusive jurisdiction
of the courts of the State of New York located in New York, New York and of
the
federal courts in the Southern District of New York with respect to any action
or legal proceeding commenced by any party, and irrevocably waive any objection
they now or hereafter may have respecting the venue of any such action or
proceeding brought in such a court or respecting the fact that such court is
an
inconvenient forum, relating to or arising out of this Agreement, and consent
to
the service of process in any such action or legal proceeding by means of
registered or certified mail, return receipt requested, in care of the address
set forth in Paragraph 11(b) hereof.
-6-
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed, as of the day
and
year first above written.
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XXXXXX
& XXXXXX SECURITIES CORPORATION
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By:
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Name:
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Title:
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PACIFIC
RESTAURANT HOLDINGS, INC.
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By:
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Name:
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Title:
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-7-
